On May 22, Matthew Spoerndle, senior managing director with Phoenix Advisors, LLC presented a credit overview for the Town of Granby at the Board of Finance meeting. Spoerndle reported that Granby is one of 34 towns in Connecticut with an AA+ rating, and the overview is a snapshot that looks at economic activity, demographic and financial data, and town management.
He explained that the General Fund balance is one of the most important variables to a ratings bureau. Granby’s tax collection rate, which was 99.3 percent at the time of the meeting, is another favorable indicator to the bond companies.
Achieving and maintaining a favorable bond rating is particularly important when a town is considering an initiative that requires a sizable investment. Out of the 34 towns, Granby ranks #6 when considering the unassigned general fund balance as a percentage of revenues. Residents with questions about Granby’s financial picture as of May 2023 are encouraged to watch the presentation on Granby Community Television (gctv16.org/viewshows/view/granby-board-of-finance—05-22-23/: the time stamp is 1:39 – 39:18).
As of June 30, the general fund balance is at 22.14 percent before the 2023-24 appropriation and it will be 21.33 percent after the appropriation. The current rule of thumb is to maintain a 15 percent general fund balance, so Granby is financially secure and would be in a stable position to purchase a bond to make a long-term capital expenditure.
If the town were to draw down the balance of the general fund to offset the costs of a project and it were to properly manage revenues moving forward, our balance potentially could be built back up before the need arises for our next bonding opportunity.
For example, the Town of Granby Radio Committee compiled a plan to replace and upgrade the town’s emergency-response communications equipment and infrastructure. According to First Selectman Mark Fiorentino, the plan and specifications address the needs of the town’s first responders’ team that includes the Lost Acres Fire Department, the Granby Ambulance Association, the Granby Police Department, the Granby Department of Public Works, and the Granby Civil Emergency Response Team.
It is projected that this upgrade will cost the town between four and five million dollars. At the July 17 Board of Selectmen meeting a motion passed that allows the radio committee, working with the First Selectman, to seek and evaluate proposals to complete the design, installation and support for a radio communication system, including the removal of old equipment.
The system replacement—whether bonded or paid in cash—will be subject to board approval as well as public vote.